STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT
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1. INTRODUCTION
1.1 RETAIL CONCEPT
The distribution of consumer ...
STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT
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1.1.2 DIVISION OF RETAIL SECTOR IN INDIA
The retail sector in In...
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Specialty stores stress on one or a limited number of complement...
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Supermarkets:
Large self-service outlets with low-cost, low- mar...
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1.2 INDUSTRY ANALYSIS OF THE INDIAN RETAIL SECTOR
1.2. 1 MARKET ...
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1.2.2 POLICY AND REGULATORY ENVIRONMENT
 To facilitate easier f...
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The franchising routes operable in India are:
• Unit franchisee:...
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 Solutions to problems related to the lease rentals and pro-ten...
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 Increase in disposable income:
By 2005, 21 million of India‘s ...
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 Further urbanization:
At present, just 30% of India‘s populati...
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Rents eat up anywhere between 15% and 20% of a retailer‘s reven...
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These changes will have far-reaching implications for designers...
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SOURCE: IBEF REPORT – RETAIL, DEC 2008
FIG 1.4
STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT
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1.2.5 KEY PLAYERS
Pantaloon Retail
Pantaloon Retail, a Future G...
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Strategic partnerships with international retailing players lik...
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Madura Garments
• Established in 1988
• Part of the Aditya Birl...
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1.2.6 KEY PLAYERS’ SWOT ANALYSIS
EARLY BIRDS
RETAILERS BRANDS P...
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1.2.7 MARKET ANALYSIS OF VARIOUS BRANDS
Source: Article- Brands...
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 RCG acquired Smash, another T-shirt brand, in 2004
 launched...
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1.2.7e) PEPE JEANS
 Company: PJL Clothing (India) Ltd
 Launch...
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1.2.7g) SPYKAR
 Company: Spykar Lifestyles Pvt Ltd
 Brand man...
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 Further, the consumption rate is growing stronger day by day ...
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 Given the fact that because of the rise in the global equity ...
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1.3 COMPANY PROFILE
Liverpool Retail India Ltd. ventured into t...
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3. Mr. Dharmendra Kothari
 Director at Liverpool Retails India...
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1.3.2 STRENGTH
Liverpool is rapidly developing its brand image ...
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1.3.4b) Liverpool To Invest Rs. 500cr in 2 yrs
 To set up a ne...
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1.3.4e) Shapoorjee Chandabhoy To Invest In Ace Tours, Liverpool...
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The company has now initiated to restructure the format of the ...
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Exclusive brand outlet (EBO) does ensure that the store is neve...
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2. INTERNSHIP PROJECT DETAILS
2.1 RESEARCH METHODOLOGY
TOPIC: ―...
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2.2 RESEARCH DESIGN
TOPIC: ―The Viability of Liverpool Retail I...
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SAMPLING DESIGN
 Sampling Techniques: Probability Sampling Met...
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2.3 CONSUMER SURVEY ANALYSIS
2.3.1 Consumers’ Ideal Time for Sh...
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2.3.2` Chosen Location To Buy Apparels
Particulars
% of
respond...
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2.3.3 Preference of Retail Store Format
Type of Retail Store
Le...
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2.3.4 Scale Of Brand Consciousness While Purchasing Apparel
Rat...
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2.3.5 Ideal Destination To Get Favourite Brand Apparels
Particu...
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2.3.7 Consumers’ Quantity of Purchase while Shopping For Appare...
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2.3. 8Striking Quality of Large Format Stores
Particulars
% of
...
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2.3.9 Significant Characteristics while Favouring a Retail Stor...
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2.3.10 Rate Of Accessibility To The Facility Of Exclusive Benef...
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2.3.11 Ideal Retail Store Format For Various Brands To Shop Fro...
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2.4 NEW INVESTMENT PROPOSAL
2.4.1 For the fresh investment in m...
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 Take a segmented view of the market:
 As in many other emerg...
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2.4.4 INVESTMENT SPECIFICS
Investment Breakup:
= Rent amount* +...
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 As per company policy: 1 sq ft. = 5 garments
So, 250 sq ft. =...
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INCOME STATEMENT (Projected)
First year '11 Second year '12 Thi...
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3. REFLECTIVE NOTE ON INTERNSHIP
In the 6 weeks of the internsh...
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4. CONCLUSION
After studying the customer survey questionnaire ...
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5. BIBLIOGRAPHY
 Marketing: An Introduction (7th Edition) by A...
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6. ANNEXURE
A STUDY ON THE CUSTOMER PERCEPTION ABOUT EXCLUSIVE ...
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Q7. When you go to shop for apparels, your purchase remains:
a....
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Q11. Do you think location of store in the proximity area affec...
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Report -The Viability Of Liverpool Retail India Ltd

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Through the market survey and personal interviews I suggested a new financial proposal for the Liverpool Retail India Ltd. My suggestions included that the company should keep their merchandise in the new format of retail outlets i.e. Large Format Stores

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Report -The Viability Of Liverpool Retail India Ltd

  1. 1. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page1 1. INTRODUCTION 1.1 RETAIL CONCEPT The distribution of consumer products begins with the producer and ends at the ultimate consumer. Between the producer and the consumer there is a middleman---the retailer, who links the producers and the ultimate consumers. Retailing is defined as a conclusive set of activities or steps used to sell a product or a service to consumers for their personal or family use. It is responsible for matching individual demands of the consumer with supplies of all the manufacturers. The word ‗retail‘ is derived from the French work retailer, meaning ‗to cut a piece off‘ or ‗to break bulk‘. Retailing has become such an intrinsic part of our everyday lives that it is often taken for granted. The nations that have enjoyed the greatest economic and social progress have been those with a strong retail sector. Why has retailing become such a popular method of conducting business? The answer lies in the benefits a vibrant retailing sector has to offer—an easier access to a variety of products, freedom of choice and higher levels of customer service. The ease of entry into retail business results in fierce competition and better value for customer. To enter retailing is easy and to fail is even easier. Therefore, in order to survive in retailing, a firm must do a satisfactory job in its primary role i.e., catering to customers. Retailers‘ cost and profit vary depending on their type of operation and major product line. Their profit is usually a small fraction of sales and is generally about 9-10%. Retail stores of different sizes face distinct challenges and their sales volume influences business opportunities, merchandise purchase policies, nature or promotion and expense control measures. 1.1.1 FUNCTIONS OF RETAILING Retailers play a significant role as a conduit between manufacturers, wholesalers, suppliers and consumers. In this context, they perform various functions like sorting, breaking bulk, holding stock, as a channel of communication, storage, advertising and certain additional services.
  2. 2. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page2 1.1.2 DIVISION OF RETAIL SECTOR IN INDIA The retail sector in India can be divided into two major categories: 1) Organized – only 5% of total share 2) Unorganized 1.1.3 RETAILING FORMAT IN INDIA Convenience Stores: These are relatively small stores 400-2,000 sq. feet located near residential areas. They stock a limited range of high-turnover convenience products and are usually open for extended periods during the day, seven days a week. Prices are slightly higher due to the convenience premium. The traditional family run convenience stores serves the purpose of the housewives who definitely wants to avoid traveling long distances to purchase daily needs. The convenience factor in terms of items, among people in general can be highlighted as below: · Groceries · Fruits · Drug Store · Necessary stationery Specialty Stores: Organised Supermarkets Hypermarkets Department Stores Speciality Chains Company owned & operated stores Exclusive Brand Outlets Unorganised Kiranas: Mom & Pop Stores Kiosks Street Markets Multi-brand Outlets FIG: 1.1 Division of Retail Sector in India
  3. 3. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page2 Specialty stores stress on one or a limited number of complementary product categories and extend a high level of service to their customers. In India, the traditionally independent retailers in the specialized market centre operate in a particular product category, at these centre attract large crowds. Such specialized retail operations provide expertise economies of scale, bargain and image to the particular stores. Chains such as the Bangalore based Kids Kemp, the Mumbai books retailer Crossword, RPG's Music World and the Times Group's music chain Planet M, are focusing on specific market segments and have established themselves strongly in their sectors. Department Stores: Large stores ranging from 20000-50000 sq. ft, catering to a variety of consumer needs, further clas sified into localized departments such as clothing, toys, home, groceries, etc. Departmental Stores are expected to take over the apparel business from exclusive brand showrooms. Among these, the biggest success is K Raheja's Shoppers Stop, which started in Mumbai and now has more than seven large stores (over 30,000 sq. ft) across India and even has its own in store brand for clothes called Stop. The other leading fashion department stores in India are Ebony, Globus, LifeStyle, Pantaloon, Shoppers‘ Stop and Westside. Hyper marts: A hypermarket is a very large retail unit offering merchandise at low prices. Superstores have a sales area of over 50,000sq.ft. Hypermarkets are characterized by large store size, low operating costs and margins, low prices and comprehensive range of merchandise.
  4. 4. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page3 Supermarkets: Large self-service outlets with low-cost, low- margin catering to varied shopper needs are termed as Supermarkets. These are located in or near residential high streets. These stores today contribute to 30% of all food & grocery organized retail sales. Super Markets can further be classified in to mini supermarkets typically 1,000 sq ft to 2,000 sq ft and large supermarkets ranging from of 3,500 sq ft to 5,000 sq ft. having a strong focus on food & grocery and personal sales. Multi Brand outlets: Multi Brand outlets, also known as Category Killers, offer several brands across a single product category. They usually do well in busy market places and metros. MBOs give the size and scalability opportunities. Customers also look for variety of products, choice of price points all in one place. This is best captured by MBOs, particularly the ones who are positioned as destination stores Discount Stores: As the name suggests, discount stores or factory outlets, offer discounts on the MRP through selling in bulk reaching economies of scale or excess stock left over at the season. The product category can range from a variety of perishable/ nonperishable goods. Malls: This is the largest form of organized retailing today. It is located mainly in metro cities, in proximity to urban outskirts. The size ranges from 60,000 sq ft to 7, 00,000 sq ft and above. They lend an ideal shopping experience with an amalgamation of product, service and entertainment, all under a common roof. Example includes Shoppers Stop, Pyramid, and Pantaloon.
  5. 5. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page4 1.2 INDUSTRY ANALYSIS OF THE INDIAN RETAIL SECTOR 1.2. 1 MARKET STATISTICS  Indian retail market is the fifth largest retail destination globally  Currently, the share of retail to the country‘s GDP is about 22% (US$ 353 billion) & is estimated to grow to $637 billion in 2015  Organized retail sector has been growing at a faster pace than traditional outlets. Its growth is expected to grow from 5% to 14%-18% in 2015  Higher disposable incomes, alterations in people‘s lifestyle, easy availability of credit cards, high exposure of brands through media, increasing number of malls and branded outlets has enabled this transition of sales from traditional outlets to organized retail  Clothing and apparel contributes to about 36% of the total organized retail sales, following food & grocery segment, in terms of value, growing annually at the rate of 10% - estimated to grow by 12%-15% per year  Apparel is the fastest growing category with both domestic and international brands  Footwear has the highest retail penetration in organized retail with wide distribution network and consumer confidence  With the opening up of the economy and globalization, India‘s retail industry has witnessed a huge change over the years and with FDI now allowing up to 51% in single brand retail 72% 10% 5% 5% 3% 2%2% 1% Fig: 1.2 India's Organised Retail Sector Food & Grocery Clothing & Textile Durables Watch & Jewellery Home Décor Health & Beauty Footwear Books, Music & Gifts Courtesy: Indian Brand Equity Foundation
  6. 6. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page5 1.2.2 POLICY AND REGULATORY ENVIRONMENT  To facilitate easier flow of Foreign Direct Investments (―FDI‖) inflow, instead of having to seek Foreign Investment Promotion Board (―FIPB‖) approval, FDI up to 100 % is allowed under the automatic route for cash and carry wholesale trading and export trading.  FDI up to 51% is allowed, with prior Government approval for retail trade in ‗Single Brand‘ products with the objective of attracting investment, technology and global best practices and catering to the demand for such branded goods in India. This implies that foreign companies can now sell goods sold globally under a single brand, such as in the case of Reebok, Nokia and Adidas. However, retailing of multiple brands, even if the goods are produced by the same manufacturer, is presently not allowed.  Relaxation of FDI restrictions are being vigorously pursued by the business and trade coalitions and are expected to fall in place over the next 3-5 years.  The most common channels for entry of foreign retailers are the strategic license agreements, franchising, distribution, manufacturing, joint ventures and cash and carry wholesale trading. Strategic license agreements This route involves the foreign company entering into a licensing agreement with a domestic retailer or partnering with Indian promoter owned companies in the Middle East (UAE) or South East Asian countries (Singapore, Malaysia, Thailand and Indonesia). Franchising This is a widely taken entry route, with many international brands setting up shop via this provision. When one buys a franchise, he is buying the right to use a specific trademark or business concept. The business one runs is essentially the same as all other business being run under the same name. In order to do this, one may have to buy things like products, tools, advertising assistance, and training from the franchisor (the company that owns the rights to the business).
  7. 7. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page6 The franchising routes operable in India are: • Unit franchisee: Franchisee is granted rights to operate a single business unit • Multiple franchisees: Individual unit franchises are given to multiple outlets, a route primarily used by domestic brands • Master franchisee: Rights are granted for an entire territory to the master franchisee and the master franchisee can in turn grant unit and multiple franchisees in that territory • Regional franchisee: This route is similar to that of the master franchisee, but applicable on a larger scale. The master and regional franchisee routes are the most preferred and the oft-adopted routes of entry into India by the international retailers. Cash-and-carry wholesale trading 100 % FDI is allowed in wholesale trading which involves building a large distribution infrastructure to assist local retailers and manufacturers. Joint ventures International firms can enter into agreements with domestic players, and set up base in India. The share of the multinational is restricted to 49 % in this route. Manufacturing International retailers can set-up manufacturing units for their products in India. Entry through this route entails the company the rights to retail the products in India through individual retailing outlets. Distribution  An international company can set up distribution offices in India and supply products to the local retailers. Franchisee outlets can also be set up in this route.  Efforts are also being undertaken by the Government to remove impediments being posed by licensing and clearance mechanisms in India; with the aim of introducing a single-window clearance mechanism. This would reduce the entry and establishment timelines for new players in the market and facilitate easy procedures in issuance of necessary approvals.  The Government is expected to take a calibrated approach in land and rent reforms to improve the real estate regulatory environment and facilitate easy access to retail space for international investors.
  8. 8. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page7  Solutions to problems related to the lease rentals and pro-tenancy laws, which significantly deter international investors, are being pursued by the Government, with initiatives like Special Economic Zones (SEZs), allotment of Government controlled land etc. 1.2.3 INDIA’S FAST-GROWING APPAREL MARKET India‘s apparel market is in the throes of change. Rapid growth and rising urbanization have spawned a new class of consumers with more money to spend, and a growing passion for fashion. In India‘s high-growth, fast-changing retail clothing market, we see significant new growth opportunities for foreign and domestic players. Though menswear has held a special place amongst apparel retailers from the start, women and kids wear are gaining momentum as the untapped market and an industry with a lot of potential. Most of the organised retailers picked up men`s clothing section, but a great deal of women`s and kids wear sections lay in hands of unorganized sector. However, now-a-days, many apparel makers are eyeing a share of this bigger pie with companies focusing entirely on women`s wear or kids wear, and menswear makers too launching special lines of women and kids wear. There is lot of specialization coming up in ethnic and western clothing, in both men`s wear and women`s wear sections. Lack of organized players in women`s wear sector has given way to apparel brands eyeing a bigger share of this untapped market. Indian apparel sales are expected to reach an estimated $25 billion this year, having grown in excess of 10 % over the past 5 years—a growth rate faster than that of the overall India retail market—and the trajectory is expected to continue. This growth is being driven by a number of factors:
  9. 9. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page8  Increase in disposable income: By 2005, 21 million of India‘s 210 million households already earned more than $4,000 a year, qualifying them for membership in what we call ―the consuming class.‖ Based on McKinsey research, by 2015 the number of consuming class households will likely triple to 64 million.  New occasions: As the lifestyles of India‘s prospering urban consumers have evolved, their clothing needs have broadened, reflecting more varied usage occasions. While the Indian shoppers love for clothes has been unchanged over the years, the average amount spent on clothes and the frequency of shopping has shown a sharp increase. Indians, who spent an average of $36 (approximately Rs 1,440) in the 2003, were seen to be spending $58 (approximately Rs 2,320) in the same period in 2008. And while only 8% men and 9% women bought clothes once a month in 2003, 22% men and 31% women now shop for clothes monthly. Indeed, 38% of Indian respondents to a McKinsey study,2008 said they were highly likely to buy apparel for special events—a significantly higher proportion than in Brazil (5%), Russia (3%) or China (6%). Family celebrations and weddings continue to eat up an enormous share of Indian consumers‘ clothing budgets.  Growth in the women’s segment: Historically, the men‘s apparel market in India has been significantly larger than the women‘s apparel market. With only 20 % of India‘s urban women in the workforce, women‘s wardrobes have traditionally been limited to home wear and items for special occasions. Now, women are more willing to dress differently when they venture beyond the home—to shop, for example, or visit a school or office.  Fashion increasingly a form of self-expression: Increasingly, Indian consumers are embracing the idea of fashion for its own sake, as a means of self-expression, and not merely as a functional purchase. Traditional clothing remains central to the way consumers dress, and the quality and craftsmanship of classic Indian clothing have drawn rave reviews in recent years from some of the world‘s leading designers, style magazines, and fashion blogs. In a recent McKinsey survey of Indian consumers, 62 % said they thought it was important to ―keep up with trends.‖ More than ever, Indian consumers are experimenting with combining styles, as seen in the recent ―Indo-fusion,‖ boom, which mixes the silhouettes of the East with the comfort cut of the West.
  10. 10. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page9  Further urbanization: At present, just 30% of India‘s population resides in cities, among the lowest urbanization rates of any nation in the world. But that has been changing. Over the next 20 years, we expect the number of Indians living in cities to grow by 300 million, where they will buy new styles and fashions to match new lifestyles. A large percentage of these new city dwellers will be in their twenties, and making first- time choices for whole categories of clothing items including denims, shirts, and even shoes.  Comparative youth of India’s population: Against the backdrop of an ageing world, India possesses the advantage of having a largely young population. 35% of India‘s population is under 14 years of age and more than 60 % of the population is estimated to constitute the working age group (15-60) till 2050. Two-thirds of Indian population is under 35, with the median age of 23 years, as opposed to the world median age of 33. India is home to 20% of the global population under 25 years of age. 1.2.4 RETAIL FORMAT IN TRANSISTION Modern retailing has entered India in form of malls and huge complexes offering shopping, entertainment, leisure to the consumer as the retailers experiment with a variety of formats, from discount stores to supermarkets to hypermarkets to specialty chains. The organized retail sector, which currently accounts for around 5% of the Indian retail market, is all set to witness maximum number of large format malls and branded retail stores in south India, followed by north, west and the east in the next two years. Large branded store chains where products are systematically stocked and displayed, will speed the transformation of consumer preferences. A clutch of Indian retailers have planned to ramp up the number of bigger stores in their portfolios the year 2010. The focus for retailers this year has moved to larger stores for several reasons. For one, retail industry experts said renting larger spaces in malls gives companies better negotiating power.
  11. 11. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page10 Rents eat up anywhere between 15% and 20% of a retailer‘s revenue, compared with the global average of 10-15% said by Shubhranshu Pani, managing director for retail at property consultancy Jones Lang LaSalle Meghraj,. Pinakiranjan Mishra, partner for retail practices at consultancy firm Ernst and Young, (E&Y) said large stores can also generate additional incomes through sub-letting spaces for shop-in-shops and in- store advertising. Source: article- Retailers Think Big, Shift Focus To Large-Format Stores From Business Standard, April 08, 2010 IMAGES F&R research study (2009) reveals that by the first quarter of 2011, India can expect to have nearly 120 million square feet of total mall space available through about 350 malls.  North & South in the Lead Pointing out that the country's North & South have been leading the Malls revolution and continue to be in the lead, the Report says that the number of operational malls in North zone will increase from the present 90 in 2010 to 150 by Q1, 2011. Thus, the percentage increase in this zone in number of malls will be 60 % by 2011 from the existing 90 malls in 2010. According to the Image F&R projection, the number of operational malls in the South zone will increase from 21 operational malls in September 2009 to 72 by Q1, 2011. The highlight of the development in South is that the total existing mall space of 7.2 million square feet is projected to be more than doubling to touch 18.43 million square feet by 2011.  West Zone & East Zone In the West, Mumbai has been dominating mall development activity and continues to do so, accounting for almost 66 % of the total 56 existing shopping malls. The report says that the number of operational malls in West zone will increase from the 56 as on September 09 to 87 by Q1, 2011. In West Zone, about 31 more malls will be added by 2011 where the total available mall space is 16.36 million square feet. This, the Report says will be increasing by 33.9 % by 2011. And in a broader sense, East zone appears to be tagging along too, albeit at a comfortable pace. The number of operational malls will be more than doubling from the present strength of 16 as on September 2009 to 37 by Q1, 2011. SOURCE: Malls of India, the 2009 edition published by IMAGES Group
  12. 12. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page11 These changes will have far-reaching implications for designers, manufacturers, and retailers targeting the Indian apparel market. Spanish fashion giant Inditex (Zara) had announced plans to enter India in 2009. Fast Retailing (Uniqlo) has pegged 2012 for market entry. FIG: 1.3 APPAREL IS THE MOST PROFITABLE SEGMENT OF THE INDIAN RETAIL MARKET TODAY CATEGORY TYPICAL RETAILER MARGIN DESCRIPTION Food 15-20% More than 80% organised retail in India if food Apparel 35-50% Highest retailer margins through apparel Electronics 5-10% Household appliances may provide as much as 8-10%, cell phones may be as low as 5-6% SOURCE: McKINSEY REPORT, 2009
  13. 13. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page12 SOURCE: IBEF REPORT – RETAIL, DEC 2008 FIG 1.4
  14. 14. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page13 1.2.5 KEY PLAYERS Pantaloon Retail Pantaloon Retail, a Future Group venture started its operations with Pantaloon Shoppe in 1993 and has since emerged the retailing giant of India with over 5 million square feet of retail space spread over 1000 stores across 71 cities in India. Pantaloon Retail operates in over twenty diverse store formats, with a spectrum of offerings ranging from food and grocery to carpentry services. It operates some of the immensely popular retail outlets of India, including the Central chain of malls, Big Bazaar and Brand Factory. The aggressive expansion rate, combined with the aim of capturing both the value segment and the lifestyle segment of the market has resulted in Pantaloons capturing a large part of the organised retail pie. In terms of retail sales mix also, the share of the lifestyle segment went up from 27 % in the second quarter of 2008-09 to 29 % in 2009-2010 (Pantaloon follows a July-to-June financial year). The company posted a 51 % jump in its net profit at Rs 50.67 crore and a 25% jump in net sales at Rs 1,912.84 crore for the second quarter ended December 31, 2009. Pantaloon Retail has many firsts to its name in the Indian market, with discounted store formats like Brand Factory setting benchmarks for new players entering the market. The unique selling proposition of Pantaloon Retail is the dual approach to tap both the ―Value‖ segment and ―Lifestyle and Luxury‖ segment consumers, by establishing retail formats in each segment like Big Bazaar, Fashion Station etc. aimed at value retailing while Central, Pantaloons captures the lifestyle segment consumers. Shoppers Stop Limited Shoppers Stop, established in 1991 with its flagship store- Shoppers Stop by the K. Raheja Group, has now expanded to over 100 retail outlets spread across 1.1 million square feet of built-up area, spanning a spectrum of retailing verticals and formats. The group offers formats in the lifestyle and luxury segment, with the growing affluent middle class population as their target consumer base. The revenue in the year 2009-2010 is Rs. 141,181.25 lacs (previous year Rs. 127,108.20 lacs), registering a growth of 11.07% y-o-y basis. The net Profit achieved in the year 2009-2010 was Rs. 5,023.05 lacs (previous year net loss of Rs. 6,371.80 lacs). Private labels account for more than 21 % of their retail revenues, with Shoppers Stop clocking impressive total number of transactions to customer footfalls ratio (conversion ratio) of 27 %.
  15. 15. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page14 Strategic partnerships with international retailing players like Mothercare Plc of Britain and Leisure & Allied Industries of Australia, are aiding Shoppers Stop in catering to the niche markets. Shoppers Stop and Hypercity Retail (India) Ltd. have jointly entered into an agreement with Home Retail Group Plc, United Kingdom, to develop the format of catalogue retailing in India under an exclusive franchise. OTHER KEY PLAYERS Tata Trent Ltd. • Established in 1998 • Revenues: Rs.40.22 cr • Retail sector activity: Apparel, Specialty – books and music • Current store format: Hypermarket, Supermarkets • Entered in Hypermarket format in 2004 with Star Bazaar • Future plan: New venture-Infiniti Retail Ltd. • Manufacture private labels in apparels • Principal fascia: Westside, Landmark, Star India Bazaar Landmark Group – Dubai based co. • Present in India since 1999 • Revenues: US$ 3.2 billion • Retail sector activity: Apparel, Home décor & Furnishing • Current store format: Department stores, Hypermarkets • Entered in Hypermarket format in 2007 • Current outlets: Lifestyle-15 outlets, Max Retail-4 outlets, 3 hyper markets • Future plan: Presence in mini metros and Tier-II cities • Principal fascia: Lifestyle, Home Centre, Max Retail, Spar
  16. 16. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page15 Madura Garments • Established in 1988 • Part of the Aditya Birla Nuvo Group since 2000 • Retail sector activity: Apparel • Principal fascia: Louis Philippe, Van Heusen, Allen Solly, SF jeans, Peter England • Joint Venture with international brands: Esprit • Current outlets: Planet Fashion-50 outlets, Trouser town-9 outlets • Future plan: Projected to increase to 300 outlets by 2009 and diversify into the women‘s wear segment Globus • Established in 1998 • Retail sector activity: Apparel • Current store format: Stand alone stores • Current outlets: 26 • Future plan: To set up additional 100 fashion stores by the end of 2012. • Manufacture private labels under Globus and F21 • Principal fascia: Globus Provogue Ltd. • Established in 1997 • Revenues: US$ 38.1 million • Retail sector activity: Apparel, Footwear • Current store format: large format store & Stand alone stores • Current outlets: 126 own outlets & 110 shop-in shops • Future plan: To manage and develop malls • Principal fascia: Provogue, Prozone
  17. 17. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page16 1.2.6 KEY PLAYERS’ SWOT ANALYSIS EARLY BIRDS RETAILERS BRANDS PLANS STRENGTHS CHALLENGES THREATS K Rhaeja Group Shopper's Stop, Crossword, Inorbit Mall, Hyper City, Café Brio/Desi Café Raising the no. of Shopper‘s Stop Outlet to 49 By 2010-End, 60-70 New Crossword Outlets Within Two Yrs, 68 Hyper City in next 5yrs & 100 Café Brio/Desi Café Pulse On Customer Tastes With Local Retailing Experience Keeping Up Brand Loyalty Could Get Bogged Down In Positioning Itself Right Future Group Pantaloon, Big Bazaar, Food Bazaar, Central, Ethnicity, Brand Factory, Home Town A Store A Day For The Next 3-4 Yrs, 3300 Planned By 2011; Currently operates around 1000 stores Can Evolve On Vast Customer Experience & Existing Models Expanding Customer Base, Sourcing Products At Cheaper Rates Straddling With Too Many Retail Formats Tata Trent Westside, Star Bazaar, Landmark Looking To Register In Hypermarkets; Currently operates in 42 retail outlets growth of nearly 28 % in the retail space since 2009; won an award of ‘'The Most Admired Private Label Fashion Retailer of the Year- 2010' Sprucing Up Product Offerings, Opening More Outlets, & Introducing New Retail Formats It‘s Smaller Retail Operations DEBUTANTS RETAILERS BRANDS PLANS STRENGTHS CHALLENGES THREATS Reliance Reliance Fresh, Reliance Mart, Reliance Super, Reliance Digital, Reliance Jewels, Shifts the focus to hypermarkets Growth through value creation. Operates several value & specialty formats Getting the retail portfolio right for Indian tastes Lack of experience in retail format, product pricing Bharti Walmart Field Fresh To open up 140 retail stores by the year-end & 15 wholesale store by next 3-years Bharti's local expertise & Wal- mart's back-end makes a lethal combo Government interventions at intervals Product pricing, shelf & overall offerings
  18. 18. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page17 1.2.7 MARKET ANALYSIS OF VARIOUS BRANDS Source: Article- Brands of India, IMAGE BoF 1.2.7a) KOUTONS RETAIL INDIA  Targeting Indian middle class where they shop as a family  Product Range: wide range of apparel designs suited for all segments including corporate, formal and casual dressings for men, women and children.  Location: in both large and small city malls and high streets.  No. of Outlets: More than 1400 stores in India out of which 1341 are franchised outlets  Company‘s Fascia:  Koutons the flagship brand  Charlie Outlaw for men  Les Femme for the modern and vibrant women  Koutons Junior for the young and energetic children  K2One for shoes, leather jackets  Accessories: Patent Club and Feel Me.  Turnover till 30 December, 09 was Rs 235.94 million.  Production Capacity:  Manufacturing capacity of 80 lakh pieces approximately per annum (cost around Rs 4 crore),  Finishing capacity of 80 lakh pieces approximately per annum(cost around Rs 4 crore)  No. of in-house manufacturing / finishing units: 18  No. of Warehouse: 14 warehouses spread across Gurgaon  Future Target: All the state capitals and districts of the states 1.2.7b) ROYAL CLASSIC GROUP (RCG)  Year of Establishment: began in 1991 as an exporter  Brand mantras  Customer is the king  Quality is God  Development:  In February 2001, the company launched its maiden T-shirt brand Classic Polo, making its foray into the domestic market. Although, Classic Polo is primarily a T-shirt brand, it also offers a complete lifestyle wardrobe like exclusive T-shirts, shirts, trousers, etc.
  19. 19. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page18  RCG acquired Smash, another T-shirt brand, in 2004  launched its exclusive premium men`s intimate wear under the brand name Smash in 2005.  Brand turnover FY ‗10 (projected): Rs 75 crore  Retail presence:  EBOs: 76; Company-owned: 52; Franchises: 24  Factory outlets: 5  MBOs: 3500+ 1.2.7c) CANTABIL  Company: a fashion-and-lifestyle label from the house of Cantabil International  Launched in India: 2000  Merchandise:  Initially formal and semi formal shirts and trousers for men  Subsequently, the brand expanded its portfolio to casuals and smart casuals for men, & also for the diverse segments of women and children  Brand mantras:  Offer the latest in fashion and style for the Indian consumers  Quality at an affordable price Brand  Turnover FY ‗10 (projected): Rs 150 crore  Retail presence: EBOs: 405  Company-owned: 60 per cent  Franchises: Remaining 40 per cent 1.2.7d) GARBO  Company: National Clothing Supply India Private Limited  Product: Kidswear  Brand mantras: Quality at affordable price  Brand turnover FY ‗10 (projected): Rs 10 crore  Retail presence: MBOs: 300
  20. 20. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page19 1.2.7e) PEPE JEANS  Company: PJL Clothing (India) Ltd  Launched In India : 1989  Brand mantra: Global, bold and ambitious, Pepe Jeans is all about premium jeans and casual wear, young at heart, positively rebellious with a broad appeal  Product portfolio: Casual Cotton, Shirts, T-Shirts, Denims, Fashion Tops, Dresses, Jackets and Accessories  Retail presence:  EBOs: 204; company-owned: 78; franchise: 126;  Factory outlets: 12; company-owned: 1; franchise-owned: 11  MBOs: +1500 1.2.7f) NUMERO UNO  Company: Numero Uno Clothing Ltd  Brand mantras  Let the product speak for itself  Superior value for money  Product Portfolio: complete casual wear brand  started manufacturing shirts in 1998 and knits and jackets thereafter  launched its footwear division in 2006  Accessories are also a strong area of growth  Brand turnover FY ‗10 (projected): Rs 140 crore  Retail presence:  EBOs: 105; company-owned: 36; franchised: 69  Factory outlets: 12; company-owned: 9; franchise: 3  MBOs: 400+
  21. 21. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page20 1.2.7g) SPYKAR  Company: Spykar Lifestyles Pvt Ltd  Brand mantras  To deliver the right value to the customer  To consistently set free latest fashion for the youth  Brand turnover FY ‗10 (projected): Rs 250 crore  Retail presence:  EBOs: 202 (all franchises);  Factory outlets: 56; company-owned: 3; franchise outlets: 53;  MBOs: 750; 1.2.8 FUTURE OUTLOOK  The Q410 BMI India Retail Report forecasts that total retail sales will grow from INR16.51trn (US$380.39bn) in 2010 to INR26.02trn (US$679.32bn) by 2014.  Of this, organized retail, which constitutes just 5% of the total market, is estimated to grow at a CAGR of US$ 107 billion by the year 2013 from US $20 billion in 2007, signifying a huge potential.  Strong underlying economic growth, population expansion, the increasing wealth of individuals and the rapid construction of organised retail infrastructure are key factors behind the forecast growth.  As well as an expanding middle and upper class consumer base, there will also be opportunities in India's second and third-tier cities.  The greater availability of personal credit and a growing vehicle population to improve mobility also contribute to a trend towards annual retail sales growth of 11.4 %.  India‘s per capita GDP has grown exponentially over the years and is expected to grow further. This along with the transition of the middle class will lead to a reduction in poverty and further the burgeoning middle class. In 2005, the middle class segment was relatively smaller in size, comprising just 5% of the total population but this is expected to increase to 41% by 2025.  The total apparel consumption by these classes is said to increase more than 10 times from $3.6 billion in 2006 to $37 billion by 2025. This data simplifies the vision for India‘s retail sector.
  22. 22. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page21  Further, the consumption rate is growing stronger day by day and the combination of rapidly rising household incomes and a growing population will lead to a significant increase in consumption.  The aggregate consumption of India is expected to grow to Rs 34 trillion by 2015 and Rs 70 trillion by 2025, a four-fold increase from the current levels of Rs 17 trillion. The Indian market is expected to be the fifth largest market in the world by 2025, surpassing the market of Germany. Although low growth of 6% annually is likely to continue for the next two years, the AEPC vision is based on sustained growth of top five apparel suppliers. Based on the past export trends of India, feasibility study and the assumption that the world apparel market would grow moderately at 8%, AEPC fixed the target for apparel exports by 2015 at US$34 billion.  The retailers are also working to overcome key hurdles. Increasing market share, improving brand image, insulating the export market by diversifying, tackling production-related issues and reducing cost disadvantage, keeping a check on debt-funded expansion, penetrating the rural markets and Tier-I and Tier-II cities, offering products for the lower income bracket and much more, is on the retailers‘ minds to make the most of the next projected boom in the market cycle.  With the second largest population in the world growing at an average of around 1% per annum coupled with rising income levels, the retail sector will ride on the consumption wave that continues to be one of the most significant components of the Indian GDP.  Malls are expected to be one of the major growth drivers of apparel retailing and in terms of opening new retail outlets, apparel retailers and brands attained a higher than expected growth rate. The market potential is clearly evident from the number of stores being added to the list of existing ones every year.  The number of operational malls is expected to grow two-fold with a major slice of development taking place in Tier-II and Tier-III cities, which are relatively newer avenues for the industry. 1.2.9 FLATTERING REMARKS  Apparel industry is considered an environment-friendly industry due to its low emission levels. The industry can leverage carbon credits saved in this industry and trade them in the world market. In fact, it can be a new source of revenue for our industry.
  23. 23. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page22  Given the fact that because of the rise in the global equity markets, the prices of some of the apparel stocks such as Zodiac, Provogue and Koutons have already gone up by an average of 150% in the last six months.  The Indian Brand Equity Foundation (IBEF) too upholds most of these projections. The country‘s retail market is the fifth largest retail destination globally to be ranked as the most attractive emerging market for investment in the retail sector by AT Kearney‘s eighth annual Global Retail Development Index (GRDI) in the year 2009.  Commercial real estate services company, CB Richard Ellis‘ findings state that the retail market in India is currently valued at US$ 511 billion.  Further, CB Richard Ellis states that India has moved up to the 39th rank in the list of the most preferred retail destination in the world in 2009, up from 44 last year.
  24. 24. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page23 1.3 COMPANY PROFILE Liverpool Retail India Ltd. ventured into the readymade garments sector in the year 2006 with its diverse product line of Shirts, Trousers, T-shirts and Men's and Women's Accessories. Liverpool incorporated in the year 2001 by launching its fashion retail chain across the country under the same brand name of "Liverpool". Liverpool is the only Brand from Ahmedabad, infact from Gujarat who has all over India retail presence in such a short span. Retail Format: Discount Format Stores 1.3.1 FOCUS The focus of the brand and infact the products USP is Quality, Variety and its very attractive Price bracket in which they come. With the exceptional fits, styling and COLOR options available in the products range, Liverpool promises to be an instant success amongst the young generation and working professionals. Liverpool Retail India Ltd. is owned by a team of distinguished Promoter and Directors. :: Promoters Mr. Vijay Singh Rathod Mr. Kailash Gupta :: Present Directors 1. Mr. Vijay Singh Rathod, Director, Liverpool Retail India Ltd.  Masters in Economics from Agra College, Agra  First job: a lowly-paid milk supervisor for Hindustan Lever Ltd in the moffusil town of Etah in Uttar Pradesh way back in 1988. 2. Mr. Kailash Gupta  Education: post graduate in Personnel Management from XLRI, Jamshedpur, and also has degree in law from the University of Delhi  Serves as Managing Director of National Multi-Commodity Exchange of India Ltd., Neptune Overseas Limited and a GoI recognized Export House  Has been Director of Personnel & Administration at Shipping Corp. of India since July 2006  Serves as Managing Director of Liverpool Retail India Ltd.
  25. 25. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page24 3. Mr. Dharmendra Kothari  Director at Liverpool Retails India Ltd.  Served as Senior Manager at RSM McGladrey FPO – H & R Block Group Company  Worked as Manager Finance & Accounts at Creative Global Services  Was at Shoppers Stop Limited at Assistant Manager – Accounts  Education:  The Institute of Company Secretaries of India  Institute of Chartered Accountant of India  Mohanlal Sukhadia University Liverpool entered in the fashion retail sector with a vision to not only spread its business in the domestic Indian market, but also make its presence felt internationally. Currently the company has 554 stores spread in different states of India namely Gujarat, Rajasthan, Bihar, Madhya Pradesh, Delhi, Punjab, Haryana, U.P., Uttaranchal, Karnataka, Tamil Nadu, Assam, Jammu & Kashmir, Himachal Pradesh, Orissa, Kerala and West Bengal. The company has just launched a budget- conscious new brand called 'Barcelona' in June, 2008, which offers garments for men and women between the price range of Rs 400 and Rs 2000 at 151 outlets in the country. The company has stepped into international market having started two stores at Dubai and shortly entering into Europe, Japan, Nepal and other International locations. Liverpool aims to cross 1000 stores target by the year end of 2011-12. Showroom area varies from 500 sq-feet to 3000 sq-feet, with the latest Retail Design and Visual Merchandise. Liverpool target customers are of all age groups & currently, the company sources its garments from third parties.
  26. 26. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page25 1.3.2 STRENGTH Liverpool is rapidly developing its brand image in customers mind and turning them into loyal customers of Liverpool. Customer loyalty doesn‘t come easy in today‘s highly competitive market. Our customers are satisfied buyers not only because we meet their requirements in terms of a premium brand but one that's reasonably priced too, which is the secret behind our customer‘s loyalty. Liverpool has a good market presence with attractive schemes and offers running on a regular basis. As the garments are designed keeping in mind the latest fashion trends, forecasts and colors, they are not only affordable but fashionable too. 1.3.3 BRANDS 1.3.4 KEY PROGRESS FOR LIVERPOOL RETAIL INDIA LTD. 1.3.4a) Liverpool Set To Carve Its Name In Guinness  Liverpool has strongly promoted its brand nation wide and within a short span of time has succeeded, by establishing 125 franchise outlets. The company now aims high to enter Guinness Book of World Records by coming up with 150 retail outlets in 16 states simultaneously.  Launched two stores in Dubai Source: Fibre2fashion News Desk – India, April 09, 2008
  27. 27. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page26 1.3.4b) Liverpool To Invest Rs. 500cr in 2 yrs  To set up a new manufacturing plant  To start new brands  To expand its current Liverpool stores to 600 outlets by March 2009 and 1000 outlets by March 2010 across the country.  To enter the high-end garment market, plan to open a chain of designer boutique stores for which it will tie up with some of the major designers in the country – Rs. 30 crore would be invested Source: Business Standard, June 16, 2008 1.3.4c) ‘Liverpool’ Opens 151 Stores On A Single Day; Enters The ‘Limca’ Book Of Records Launched 151 retail stores for another apparel brand called ―BARCELONA on 15th June 2008. Interestingly, all the stores were launched on the same day and at the same time across the country. Barcelona clothes for men and women would be priced between Rs 400 and Rs 2000. Source: Fibre2fashion News Desk – India, 23 June, 2008 1.3.4d) Liverpool Plans IPO; Mulls Acquisitions  Liverpool Retail India Ltd plans to launch an initial public offer (IPO) in the financial year 2010-2011. Around INR 1 billion is expected to be raised from banks through loan and private equity whereas INR 1 billion may be raised through the IPO.  Launched first Liverpool family store in Rajasthan in August  Launched foremost Liverpool Kidsland outlet in Gujarat in September SOURCE: Fibre2fashion News Desk – India, 16/10/2009
  28. 28. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page27 1.3.4e) Shapoorjee Chandabhoy To Invest In Ace Tours, Liverpool Mumbai-BASED non-banking finance company (NBFC) Shapoorjee Chandabhoy Finvest Pvt Ltd (SCFPL) plans to invest Liverpool Retail India Ltd. The negotiation with company is at the final stage and expected to conclude within the next few months. If all goes as planned, SCFPL will pick up 20% in Liverpool Retail India Ltd, an Ahmedabad-based readymade garment retailing company, for Rs 15 crore. SOURCE: 22 Jun 2010, ET Bureau 1.3.4f) City-Based Apparel Firm Eyes Stores In Japan  Liverpool Retail India Ltd plans to set up stores in Japan and Nepal this fiscal. The company also intends to come out with an IPO of around Rs 150 crore. For its foreign venture, it is in talks with Japanese and Nepal-based firms.  Planned to start 20 stores in Nepal and an equal number in Japan  Claimed to be the number two apparel company in the organised retail sector after Koutons Group SOURCE: Ahmedabad Mirror, 20 July, 2010 1.3.5 CURRENT SCENARIO Liverpool Retail India Ltd. currently operates around 500 Exclusive Brand Stores running on the franchise format. It has only one warehouse which is situated in Naroda, Ahemdabad. Its biggest project ever, which includes setting up of garment manufacturing unit, huge lifestyle stores & warehouse facilities is in the pipeline. Liverpool Retail India Ltd.‘s minimum guaranteed payments to franchisees cover lease rentals, employee costs, and other establishment costs apart from incentives on sales. Presently the company is facing heat of minimum guarantee fad. Due to the peculiarities of the Indian real estate market minimum guarantee has come to the fray. Hence presently the company is in restructuring stage where it is focusing on cost cutting & withdrawing the loss making franchisees. Most of the company‘s earlier franchisees had been provided a fixed minimum guarantee on the assumptions of good sale. The reason to offer minimum guarantee is to ensure returns to franchisees. The risk is covered due to MG.
  29. 29. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page28 The company has now initiated to restructure the format of the Minimum Guarantee from the fixed one to the commission base. The commission can range from 25% to 33% on the net sale. The fundamental of the thought is to reach a level where both parties undertake their fair share of risks to make it turn into a business format franchising. Next to these essential commercial factors (investments and earnings), the support facilities from the company, like supply chain management, merchandise in tune with the season and competition, stock refreshment as per industry standards, quality uncompromised, and price worth the product that constitute the key ingredients for the goodwill of the company are put under scanning in the reforming strategy. Among other things, the company will also revamp its discount model this year. 1.3.6 OPPORTUNITY An important aspect of the current economic scenario in India is the emergence of organized retail. There has been considerable growth in organized retailing business in recent years and it is poised for much faster growth in the future. India is on the radar of Global Retailers and suppliers / brands worldwide are willing to partner with retailers here. Further, large Indian corporate groups like Tata, Reliance, Raheja, ITC, Bombay Dyeing, Murugappa & Piramal Groups etc and also foreign investors and private equity players are firming up plans to identify investment opportunities in the Indian retail sector. Retail Space is no more a constraint for growth. Favorable demographic and psychographic changes relating to India's consumer class, international exposure, availability of increasing quality retail space, wider availability of products and brand communication are some of the factors that are driving the retail in India. Indian consumers are rapidly evolving and accepting modern formats overwhelmingly. Customers also look for variety of products, choice of price points all in one place The economy is tougher to categorize as an influence on shopper behavior – particularly as it relates to choosing one format over the other. Thus, to ensure high return on investment & a competitive edge in the market, the company needs to ascertain the new retail formats i.e. multi-brand outlets (MBOs) & large format stores (LFS) that are flavor of the season. Consumers want the convenience of shopping at branded stores that have a wide range of products and broader aisles. They are looking for all the modern conveniences and they appreciate all-under-one roof concept.
  30. 30. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page29 Exclusive brand outlet (EBO) does ensure that the store is never out of stock, thanks to the predominant one-brand presence & also EBOs are in command with better visual merchandising, more control over the brand, customer experience etc. However, veterans argue that it is the multi- brand outlets, which drive more footfalls. In the MBOs, the retailers offer wider range of merchandise. In the response to the open poll question on IndiaRetailing — Exclusive brand stores may allow for greater depth and branding of merchandise, but multi-brand outlets and shop-in-shops are really the revenue drivers for a brand — 91.67% of the respondents support the statement while the remaining 8.33% of them negated it. MBOs and shops-in-shop (SIS) can certainly help a brand build its footprint more rapidly and with lower capital & give the size and scalability opportunities than it could with only exclusive brand outlets, as discussed by Devangshu Dutta, chief executive, Third Eyesight. Positioning a brand in multi-brand outlets enables the brand to enhance reach across a cross-section of customers, thereby driving revenue. The company can enter into new retail formats along with its current store layout as the exclusive stores would help in building the brand and the multi-brand stores and shop-in-shops will help in increasing the visibility and reach of the brand as sales channels for the fast moving SKU‘s in the brand.
  31. 31. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page30 2. INTERNSHIP PROJECT DETAILS 2.1 RESEARCH METHODOLOGY TOPIC: ―The Viability of Liverpool Retail India Ltd. In Large Format Stores‖ The research was to be conducted in mainly four stages: STAGE 1: Identifying the Problem a) Primary information was explored about the company‘s retail format. b) Inputs, about the basic (Generic) factors that are considered while patronizing a retail format were gathered. c) Various materials published in similar studies were consulted. d) Key factors & the kind of data required for successful completion were being identified. STAGE 2: Collecting Suitable Data a) A questionnaire was framed while considering both the key & the generic factors, which affects consumer selection behavior & decisions. b) Personal interview taken of following people:  Entrepreneurs, Store Managers & Staff working in various retail formats  Customers who buy apparels from various types of retail stores STAGE 3 : Analysing & interpreting the collected Data A data sheet has been formatted & analysed by feeding the data collected by filling Questionnaires into excel sheet systematically. STAGE 4 : Writing the Report Detailed report has been made as per the analysis from time to time in a most possible proper, convenient & scientific format by applying suitable higher order statistical procedures to define & interpret the required information.
  32. 32. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page31 2.2 RESEARCH DESIGN TOPIC: ―The Viability of Liverpool Retail India Ltd. In Large Format Stores‖ AREA OF RESEARCH: Marketing - Retail Management RESEARCH OBJECTIVES:  To propose Liverpool Retail India Ltd. a business plan about investment in Multi-brand outlets (MBOs) & Large Format Stores (LFS) o To provide information about various pros & cons of the new investment in LFS o To give data of current status & performance of other apparel brands in all formats of retail stores o To derive the relationship between the fresh investment & impact on sales of Liverpool retail in market o To know consumer purchasing behavior in Large Format Stores (particularly apparel department ) RESEARCH TYPE Our research type is Quantitative and Suggestive research because it compares the performance of various formats of retail outlets and attractiveness of the investment in the new retail formats. DATA REQUIREMENT For this research we required: i) Entrepreneurs who are already functioning in EBOs, MBOs & LFS ii) Store Managers & Staff of the various brands present in the store iii) Customers who are actually purchasing from various types of apparel retail stores DATA COLLECTION METHOD Target population was asked to fill up the Questionnaire and Information has been sourced from books, newspapers, trade journals, and white papers, industry portals, government agencies, trade associations & monitoring industry news and developments.
  33. 33. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page32 SAMPLING DESIGN  Sampling Techniques: Probability Sampling Method In this Probability sampling Method, we had used the Simple Random Sampling as in our research each respondents in the population had an equal opportunity of selection. Each Respondent was selected independently of every other respondent.  Sample Size: 100 people  Survey area: Customers located in different area of Ahemdabad city  Scaling Techniques We have used the Comparative Scaling techniques as for capturing the data about the preference and performance of various formats of retail store. LIMITATIONS OF THE STUDY  It was be difficult to get sales details from the store managers of other apparel brands because of its confidentiality.  The bias of respondents while filling questionnaire cannot be eliminated.  The business proposal is purely on the basis of assumptions due to the lack of data & experience of the researcher.
  34. 34. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page33 2.3 CONSUMER SURVEY ANALYSIS 2.3.1 Consumers’ Ideal Time for Shopping Apparels Particulars No. of respondents On Weekends 11 Once or more in a month 16 Once in two months 22 Only on special occasions 27 Only when necessary 24 ANALYSIS: According to survey, people buy clothes during celebrations such as birthdays, Diwali, or marriage as 27% & 24% of the total respondents prefer to buy apparel on special occasion or when necessary respectively. Also 22% respondents told that they buy clothes on regular interval of two months or more for trying out latest fashion. The 27% of respondents who shop frequently buys clothes from local market or near-by outlets. 11% 16% 22%27% 24% Graph 2.3.1 Consumers’ Ideal Time for Shopping Apparels On Weekends Once or more in a month Once in two months Only on special occasions Only when necessary
  35. 35. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page34 2.3.2` Chosen Location To Buy Apparels Particulars % of respondents Local Market 2 Near-by local retail outlets 25 Exclusive Brand Outlet – (e.g. Spykar, Pepe) 28 Multi Brand Family Store - (e.g. Kenzer, Half-ticket) 11 Large Format Store - (e.g. Central, Pantaloons, Westside) 34 Do not prefer to buy ready-made garments 0 ANALYSIS: 34% of the sample size has adopted the new retail format to shop followed by exclusive brand: 28%. Near-by local retail outlets also take prominence when going out for shopping as 25% of the overall respondents prefer them over other areas. 2% 25% 28%11% 34% 0% Graph 2.3.2 Chosen Location To Buy Apparels Local Market Near-by local retail outlets Exclusive Brand Outlet – (e.g. Spykar, Pepe) Multi Brand Family Store - (e.g. Kenzer, Half-ticket) Large Format Store - (e.g. Central, Pantaloons, Westside)
  36. 36. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page35 2.3.3 Preference of Retail Store Format Type of Retail Store Least Preference Neither less nor high preference High Preference Exclusive Brand Outlet – (e.g. Spykar, Pepe) 28 25 47 Multi Brand Family Store - (e.g. Kenzer, Half-ticket) 44 43 13 Large Format Store - (e.g. Central, Pantaloons, Westside) 28 32 40 I. ANALYSIS: ANALYSIS: High preference is given to the exclusive brand outlets (47%) followed closely by large format store (40%). The basis for going to exclusive brand outlet is the variety of merchandise available there & the staff ambience and service is good as compared to large format store where only limited stock is available & it‘s much more about self service. The respondents informed that they are not use to the new trend of going from one corner to other for shopping a single garment. 0 10 20 30 40 50 Least Preference Neither less nor high preference High Preference 28 25 47 44 43 13 28 32 40 Graph 2.3.3 Preference of Retail Store Format Exclusive Brand Outlet – (e.g. Spykar, Pepe) Multi Brand Family Store - (e.g. Kenzer, Half-ticket) Large Format Store - (e.g. Central, Pantaloons, Westside)
  37. 37. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page36 2.3.4 Scale Of Brand Consciousness While Purchasing Apparel Rating No. of Respondents 1 = Least brand conscious 18 2 = Little brand conscious 22 3 = Neutral 27 4 = Much Brand conscious 19 5 = Most Brand conscious 14 ANALYSIS: Only 33% of the respondents told that they look for branded apparels while shopping whereas 27% were neutral on rating their brand consciousness i.e. they said that it depends on the mood or occasion to go for branded or unbranded apparel. Besides this 40% respondents are certainly not brand-stuck as they feel that comfort & style is more important while wearing. So it‘s a good sign for new entrants in the industry to excel by serving the latest taste to the buyers. 18% 22% 27% 19% 14% Graph 2.3.4 Scale of brand consciousness while purchasing apparel 1 = Least brand conscious 2 = Little brand conscious 3 = Neutral 4 = Much Brand conscious
  38. 38. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page37 2.3.5 Ideal Destination To Get Favourite Brand Apparels Particulars % of Respondents Exclusive brand outlet 45 Large format store 55 2.3.6 Action Taken When Preferred Brand’s Stock Is Unavailable Particulars % of Respondents Wait for the stock to come 13 Go to another outlet of the same brand 24 Look for some other brand immediately 50 Hang around for some time, then finally shifts to another brand 13 ANALYSIS: As per the survey, people are now moving towards large format stores (55%) to purchase their favourite brand apparels due to the characteristics of variety. Further if they don‘t like the stuff or stock is unavailable of their preferred brand 50% respondents said that they would switch to other brands immediately. Thus the frequency of brand loyalty is decreasing gradually. This is the present distinctiveness of this dynamic & ever changing apparel retail sector. 45% 55% Graph 2.3.5 Ideal Destination To Get Favourite Brand Apparels Exclusive brand outlet Large format store 13% 24% 50% 13% Graph . 2.3.6 Action Taken When Preferred Brand’s Stock Is Unavailable Wait for the stock to come Go to another outlet of the same brand Look for some other brand immediately Hang around for some time, then finally shifts to another brand
  39. 39. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page38 2.3.7 Consumers’ Quantity of Purchase while Shopping For Apparels Particulars % of Respondents Exactly what is needed 43 More than what had been planned 50 Much more than planned 7 ANALYSIS: Exactly half of the respondents do shopping more than planned so once they go for purchasing apparels they look for new styles and new products & if they match their taste they‘ll certainly buy it. This gives opportunity to the stores to keep multiple items along with the main merchandise such as formal wear store keeps tie, belts & handkerchiefs as accessories. 43% 50% 7% Graph 2.3.7 Consumers’ Quantity of Purchase while Shopping For Apparels Exactly what is needed More than what had been planned Much more than planned
  40. 40. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page39 2.3. 8Striking Quality of Large Format Stores Particulars % of Respondents Product range and variety across all age groups 30 Multiple brands under one roof 34 Loyalty programs 7 Ambience/ in store setup 4 Convenience in shopping 4 Rebates and discounts on purchase 15 Visual display 6 ANALYSIS: Multiple brands under one roof (34%) & product range across all age groups (30%) are presently the new tastes & obvious winners of liking large format stores. 15% of the respondents, generally in early twenties, also marked rebates & discount on purchase for going to shop in large format stores. The individual store is unable to fulfill all the demands of the customer at one go so the key to their query is Large Format Store. 30% 34% 7% 4% 4% 15% 6% Graph 2.3.8 Striking Quality of Large Format Stores Product range and variety across all age groups Multiple brands under one roof Loyalty programs Ambience/ in store setup Convenience in shopping Rebates and discounts on purchase Visual display
  41. 41. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page40 2.3.9 Significant Characteristics while Favouring a Retail Store Characteristics % of High Rating- Respondents Mean of Ratings Quality 100 4.21 Variety 100 4.05 Multi Brand 97 3.8 Convenience 93 3.73 Store Ambience 88 3.66 Window Display 86 3.46 Staff Ambience 81 3.46 Affordability 81 3.27 Deals & Offers 65 3 Out store promos 54 2.57 In-store promotions 46 2.51 ANALYSIS: The customers of sample size gave high priority to quality & variety available while selecting a retail store to shop. The multi-band, convenience & store ambience are the important characteristics that a shopper looks for. The contrasting fact visible here is the affordability & deals and offers are given least preference over the other factors. This clearly evidences change in buying habits of Indian consumer. Thereafter they are also held by the visual merchandising of a store. They want to get well treated by the staff of the stores. 11% 11% 10% 10% 10%9% 9% 9% 8% 7% 6% Graph 2.3.9 Significant Characteristics While Selecting a Retail Store to Shop Quality Variety Multi Brand Convenience Store Ambience Visual Merchandise Staff Ambience Affordability Deals & Offers Out store promos In-store promotions
  42. 42. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page41 2.3.10 Rate Of Accessibility To The Facility Of Exclusive Benefits And Privileges Given In Large Format Stores Particulars % of Respondents Yes 64 No 36 ANALYSIS: The response to this question illustrates a differing opinion from the earlier one. On the one hand respondents have not given importance to the out-store as well as in-store promotions but on the other hand the rate of accessibility to the exclusive benefits & privileges given in Large Format Stores is quiet high. The reason behind to provide these benefits is to retain customer loyalty as today‘s buyer is more experimenting & brand-switcher. From the end of the customer, these customer loyalty programs give better remuneration in long term than discounts & other offers. 64% 36% Graph 2.3.10 Rate Of Accessibility To The Facility Of Exclusive Benefits And Privileges Given In Large Format Stores Yes No
  43. 43. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page42 2.3.11 Ideal Retail Store Format For Various Brands To Shop From Particulars % of Respondents BRAND Exclusive Brand Outlet Large Format Store Flying Machine 57 43 Van Heusen 56 44 Pepe Jeans 43 57 Wrangler 64 36 Lee 45 55 Levi‘s 52 48 Liverpool 30 70 Koutons 38 62 ANALYSIS The large format store is the current flavour of the respondents over the exclusive brand outlet. The shopper now doesn‘t want to attach to a single brand for a long time as well as he wishes to have all the brands under one roof for convenience. People are much loyal to the brands such as Wrangler, Flying Machine & Van Heusen but Liverpool & Koutons, both discount stores, are much preferred in Large Format Store so there is a new opportunity for both the brands. 57 56 43 64 45 52 30 38 43 44 57 36 55 48 70 62 Flying Machine Van Heusen Pepe Jeans Wrangler Lee Levi’s Liverpool Koutons Graph 2.3.11 Ideal Retail Store Format For Various Brands To Shop From Exclusive Brand Outlet Large Format Store
  44. 44. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page43 2.4 NEW INVESTMENT PROPOSAL 2.4.1 For the fresh investment in multi-brand outlets & large format stores the company should focus on three decisive factors:  Shape the category: Winners will innovate occasions, looks, and wardrobes; the focus will therefore be broader than just building brands. E.g.:  Over the past three years, for instance, major jewelry brands have revived a 5,000 year-old ―sacred‖ day known as ―Akshay Tritha,‖ which now accounts for the largest single-day jewelry sales in India.  The ―Friday dressing‖ concept, introduced by one apparel brand, asked young professionals to buy brighter colors for Fridays, expanding the wardrobe in the process.  There is even a place for more cutting-edge trends such as organic clothing: apparel retailers Van Heusen and Arrow recently launched 100 % organic lines made of cotton, linen, and natural dyes.  Focus on inventory and markdown management:  Today, apparel is one of India‘s most attractive business segments due to its high margins. Looking at an index based on the cost of a basic white shirt, it has found that Indian apparel prices have doubled over the last decade, and tend to be 25 to 30% higher than in China as a result of supply chain inefficiencies and restricted competition.  Winners will need to get the back-end operations right much earlier than the scale of the market suggests: managing margin through smarter in-season markdowns, a disciplined balance between core fashion and high fashion, managing inventory through a proper mix of made-to- order and later engagement rates, and keeping 50 to 60% of regularly restocked items at the core have become part of a winning retail formula.  Though optimum margins on these pieces of clothing may not be as much as the more expensive, high-impact fashion pieces, they keep customers coming back regularly.  The high fashion range should be advertised and showcased, but kept only to 10 to 15% of inventory to reduce the impact of markdowns.
  45. 45. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page44  Take a segmented view of the market:  As in many other emerging markets, not all consumer segments or geographies are the same. E.g., consumers in the north tend to spend more than in other regions due to cooler climates and different approaches to social occasions.  Similarly, retailers cannot ignore the smaller cities, which will drive apparel growth opportunities, even for more expensive brands. Benetton, for example, recently hit $100 million in sales in India, and is targeting $250 million within the next 3-4 years, largely by targeting smaller cities, which are already contributing about 20% to the company‘s growth and growing much more quickly than in the larger markets.  Winners who want to build real scale in India will be those who understand the market in a granular manner, and then ―own‖ the customer throughout their lifecycle with a portfolio of brands, price points, and formats. 2.4.2 PRDUCT INFORMATION Retail Format: Large Format Store Brand: Liverpool ‘Youth Category: Semi-Premium Brand Style: Casuals Merchandise: Denims & T-shirts Accessories – Wallets, Belts, Handkerchiefs Price Range: T-Shirts = Rs. 699/- to Rs. 999/- Denims = Rs. 899/- to Rs. 1599/- 2.4.3 TARGET MARKET Demographic  Age - Between 18yrs - 30yrs  Income - >INR 15,000 p.m.  Generation - Generation Y Psychographic  Personality – Competent, Sophisticated, Strivers, Achiever, Experimenters  Life Style – Brand Conscious, Pleasure & comfort seeker, Behavioral  Loyalty Status – Shifting loyal  Readiness Stage for buying – Interested  Attitude towards product - Positive
  46. 46. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page45 2.4.4 INVESTMENT SPECIFICS Investment Breakup: = Rent amount* + merchandise cost + salary + margin given to store authority + miscellaneous (branding, snacks expense, incentives, etc.) *Rent Amount includes furniture fixture, Account Staff/Cashier, Security, Electricity and Common Maintenance 2.4.5 SOURCES OF FINANCE Own reserves: Rs. 5 Lac Bank Over Draft: Upto Rs. 50000 2.4.6 ASSUMPTIONS  Our projections are based on the assumption that the economy, consumer spending habits and population growth in India will continue for the foreseeable future.  It must also be assumed that the company‘s present and future suppliers will continue to sell inventory at prices that allow us to maintain present margins. It is also important that the company is able to hire reliable employees at reasonable wages.  Rent amount:  Store Space Required: 250 sq. ft.  Cost Price per sq. ft: Rs. 150/- to Rs.250/- p.m.  Rent per month: Rs. 220 * 250 = Rs. 55000/-  Merchandise cost FY 2011 FY 2012 FY 2013 Avg. Cost price of Jeans (in Rs.) 350 400 400 Avg. Cost price of T-shirt (in Rs.) 150 200 200 No. of pieces bought per year 2800 1600 1200  The merchandise bought would be in the ratio of 60:40 i.e. 60% of the total merchandise will be jeans & 40% will be t-shirts.  During season sale, the discount limit on the merchandise would be up to 40% of the original selling price.
  47. 47. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page46  As per company policy: 1 sq ft. = 5 garments So, 250 sq ft. = 1250 garments Hence, 1250 garments are required in the store for display & 100 garments will be needed for stock up in the store house through out the year.  The creditors will give 90 days credit limit to the company. Cash Budget for the first year - 2011 (Projected) in Rs. Jan Feb Mar April May June July Aug Sep Oct Nov Dec Opening Balance 500000 429000 446429 56238 73524 99038 1224 26424 59167 5382 4846 38799 Sales 0 120000 110000 108000 118800 108000 151200 129600 146200 118800 143000 135000 Other Income (Interest) 0 0 0 0 0 0 0 0 0 0 0 0 Additional Capital 20000 20000 0 35000 25000 10000 35000 Total Cash Inflow 500000 549000 556429 164238 192324 227038 132424 156024 240367 99182 137846 208799 Rent 55000 55000 55000 55000 55000 55000 55000 55000 55000 55000 55000 55000 Salary 0 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 Purchase 0 0 405000 0 135000 135000 108000 Commission (25% on Net Sales) 0 28571 26190 25714 28286 25714 36000 30857 34810 28286 34048 32143 Advertisement Expenditure 10000 5000 1000 0 0 0 0 1000 0 1000 0 0 Misc. Expenditure 6000 4000 3000 0 0 0 5000 0 0 0 0 0 Interest ( 6% pa) 100 0 0 175 50 0 175 Total Cash Outflow 71000 102571 500190 90714 93286 225814 106000 96857 234985 94336 99048 205318 Net Cash 429000 446429 56238 73524 99038 1224 26424 59167 5382 4846 38799 3481 Profit & Loss Statement for the first year ( Projected) in Rs. Opening Stock 0 Sales 1388600 Purchase 783000 Closing Stock 365850 Gross Profit 971450 Salary 120000 Gross Profit 971450 Rent 660000 Commission 330619 Misc Expense 13000 Advertisement Exp 18000 VAT 28838 Interest 500 Net Profit -199507
  48. 48. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page47 INCOME STATEMENT (Projected) First year '11 Second year '12 Third year '13 Sales 1388600.00 2290000.00 2410000 Less : Cost of Production (417150.00) (465050.00) (384000) Gross Profit 971450.00 1824950.00 1589473 Less : Administrative & Selling Expense (1170457.00) (1587300.00) (1368142) EBDIT (199007.00) 237650.00 954861 Less : Depreciation 0.00 0.00 0 EBIT (199007.00) 237650.00 954861 Less : Interest (500.00) (500.00) (50) EBT (199507.00) 237150.00 954811 Tax @ 30% 59852.10 (71145.00) (286443.30) EAT (139654.90) 166005.00 668367.70 2.4.7 INCOME STATEMENT PROJECTIONS The gross sale in the statement shown here is on the basis of no. of units sold per year that is 1500, 2000 & 2300 for the FY 2011, FY2012 & FY2013 respectively. Based on growth rate of apparel retail sector & our marketing plans, location, store size and product offerings, we expect to collect annual sales of Rs.13,88,600 in year one, Rs. 22,90,000 in year two & Rs. 24,10,000 in year three. The break-even would be achieved before the completion of the third year of the opening of the store. Our minimum monthly fixed costs are Rs.65, 000 per month per store. The accompanying income statement gives the specifics of a single store & demonstrates the company's profitability. Thus on the basis of presumption at this point it can be concluded that though the project shows loss in the first year of opening, as the sale grows in the later years the profits margin increases itself keeping all the external factors constant. The company can make it a sound investment by its deep knowledge & long experience in apparel retail industry. By keeping the quality, variety & style at most priority & good communication strategies followed by constant watch on the market dynamics & behavioral change in shoppers‘ buying pattern, the company can make the venture a grand success in long term.
  49. 49. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page48 3. REFLECTIVE NOTE ON INTERNSHIP In the 6 weeks of the internship program, I have discovered much about the retail industry and its working culture. I got a good exposure to the real image of corporate life; walking along with multiple liabilities, new challenges and mind stress every morning. The person who has the skill to manage this steady stress with ease will get shine as an asset in this field. I had been specified on-the-job training in marketing division as well as visual merchandising department. Though both the sections have completely different functions they are interdependent to hold the company successfully from the front-end. In the highly dynamic marketing department the duties & responsibilities are changed or added as the situation demands. The training helped me in understanding the operations and working at the company based on franchisee format. I have found out that franchising today has not been restricted to product only where the franchisor, franchisee transact the product but the franchisor has gone above limits to include into fold training and orientation of franchisee and his team in maneuvering incredibly successful sales and imprinting brand name in the minds of customers, through franchise outlet, who surrogates the face of the brand. The online as well as telephonic co-ordination among departments which are inside as well as outside the infrastructure has become an integral part of the job specification. The project given during the internship enhanced my knowledge about the procedures exercised to enter into different formats of a retail store. I got the opportunity to meet eminent personalities of the apparel retail industry to gather information for the report. The noteworthy learning is to get assurance about the correctness and clarity of information on any subject or matter prior to taking any decisive action. The training taught me that to be successful at a position one requires the absolute knowledge of the industry, clarity of job description & aptitude of learning. I personally think that sales and marketing is not everyone‘s cup of tea but if one set his target high and continuously strive towards that, nothing is impossible. The only thing required in our field is a right & positive attitude towards attaining one‘s goal.
  50. 50. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page49 4. CONCLUSION After studying the customer survey questionnaire statistically and theoretically as well and after observing the consumer‘s mood and their preferences it can be inferred that Big Retail is here to stay. Consumers make retail format choices based on a complex set of interrelated attributes or ―utilities‖. The relative importance of any one of these utilities is influenced by the environment the consumer is presented with on any given shopping occasion & hence the consumer‘s preferences are changing rapidly and becoming highly diversified. It is difficult for the retail stores to satisfy all the needs of the customers. The most of the consumer‘s want to get some best quality, variety, exclusive benefits and privileges given on every purchase and a shopping comfort as well. Those who are able to purchase their needs and want for a month in a bulk prefer to go to the large format stores. Because of competitions in the market the branded wears have also become affordable so the younger generation prefers to purchase from the retail outlets where multi-brands are available. Thus, only the big retail chains are able to satisfy all these needs of the new age consumers whereas there is still some consumers mostly of the late 20‘s who are willing to purchase from the exclusive brand outlets. Some of them have perception that these big stores are too costly to afford and some of them are not able to make purchases in a bulk so they do not want to waste their time to go especially to the big store for 2-3 items purchase. Our survey respondents certainly seem to feel that ―who you are selling to and how‖ is going to trump ―what you are selling‖ in the future. This means formats like ―the youth store‖ or ―the senior store‖ might make more sense than ―the apparel store‖. And the respondents clearly feel that the market is going to take a step back in importance to format success. Assuming that improvements in infrastructure and lower real estate costs become a reality, Big Retail still has a long way to go before satisfying the highly diverse needs of the Indian population. As a result, there will be a steady state where Big Retail will co-exist with Small Retail.
  51. 51. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page50 5. BIBLIOGRAPHY  Marketing: An Introduction (7th Edition) by Armstrong and Philip Kotler (2005), Dorling Kindersley (India) Pvt. Ltd., New Delhi.  Marketing Research: An Applied Orientation (5th Edition) by Naresh K.Malhotra & Satyabhushan Dash (2009), Dorling Kindersley (India) Pvt. Ltd., New Delhi.  Research Methods for Business Students (3rd Edition) by Mark Saunders, Philip Lewis and Adrian Thornhill (2007), Dorling Kindersley (India) Pvt. Ltd., New Delhi  Retailing: Environments & Operations (Indian Edition) by Andrew J Newman & Peter Cullen (2009), Cengage Learning India Pvt. Ltd., New Delhi.  ‗Retail Hotspot‘ The Hindu Business Line, 22 August 2002  http://economictimes.indiatimes.com/articleshow/6078501.cms  http://investing.businessweek.com/research/stocks/private/snapshot.asp?privcapId=45981969  http://www.primaryinfo.com/apparel_retailers.htm  http://www.bespokecreations.net/Resources/Brands%20of%20India_Part_1.pdf http://www.business-standard.com/india/storypage.php?autono=326168  http://www.clickindia.com/detail.php?id=2485181  http://www.docstoc.com/docs/10893194/Indian-Retail-Industry-Report-220708  http://www.docstoc.com/docs/12163960/RETAIL-CONCEPT  http://www.financialexpress.com/news/apparel-retailers-move-to-small-towns-for- growth/494604/0  http://www.franchiseindia.com/magazineArticlesView.php?magzid=49&artid=49-1- 1&title=May+2009+Vol.+10+No.+3&p1=2&p2=&year=2009  http://www.indiaretailing.com/news.aspx?topic=1&Id=4155  http://www.referenceforbusiness.com/business-plans/Business-Plans-Volume-09/Retail- Clothing-Store.html  http://www.oppapers.com/essays/Branded-Outlets-Vs-Multi-Brand-Stores/224478  http://www.scribd.com/doc/27403185/Indian-Apparel-Retail-Sector-an-Overview  http://info.shine.com/Article/Retail/Retailers-think-big-shift-focus-to-large-format- stores/4000/cid139.aspx  http://www.thebusinessplanstore.com/business_plan_financial_projections.htm#BalanceSheet s  http://thirdeyesight.in/articles/all_about_format.html
  52. 52. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page51 6. ANNEXURE A STUDY ON THE CUSTOMER PERCEPTION ABOUT EXCLUSIVE BRAND OUTLET (EBO), MULTI BRAND OUTLET (MBO) & LARGE FORMAT STORE (LFS) I, Nikita Sanghvi, the student of Stevens Business School, Kalol, is doing a study on customer perception about EBO, MBO & LFS stores. I would like you to fill up the questionnaire given below. Your valuable feedback will help me with the analysis required in completing my project report. Q1. How often do you shop in an apparel and lifestyle showroom? a. On Weekends [ ] b. Once or more in a month [ ] c. Once in two months [ ] d. Only on special occasions [ ] e. Only when necessary [ ] Q2. From where do you buy your apparels? a. Local Market [ ] b. Near-by local retail outlets [ ] c. Exclusive Brand Outlet – (e.g. Spykar, Pepe) [ ] d. Multi Brand Family Store - (e.g. Kenzer, Half-ticket) [ ] e. Large Format Store - (e.g. Central, Pantaloons, Westside) [ ] f. Do not prefer to buy ready-made garments [ ] Q3. Rate your shopping preference on the scale of 1-3 where: 1= least preferred & 3= Most preferred a. Exclusive Brand Outlet – (e.g. Spykar, Pepe) [ ] b. Multi Brand Family Store - (e.g. Kenzer, Half-ticket) [ ] c. Large Format Store - (e.g. Central, Pantaloons, Westside) [ ] Q4. How brand conscious are you; rate yourself on the scale of 1-5: (Rate: 1= least brand conscious & 5= Most brand conscious) [ ] Q5. To buy your preferred Brand apparels you go to its- a. Exclusive brand outlet [ ] b. Large format store [ ] Please state the reason for your choice: ______________________________ Q6. What do you do when your preferred brand’s stock is not available? a. Wait for the stock to come [ ] b. Go to another outlet of the same brand [ ] c. Look for some other brand immediately [ ] d. Hang around for some time, then finally shifts to another brand [ ]
  53. 53. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page52 Q7. When you go to shop for apparels, your purchase remains: a. Exactly what you need [ ] b. More than what you had planned [ ] c. Much more than planned [ ] Q8. What attracts you towards a Large Format Stores? a. Product range and variety across all age groups (menswear, women wear and kids wear) [ ] b. Multiple brands under one roof [ ] c. Loyalty programs [ ] d. Ambience/ in store setup [ ] e. Convenience in shopping [ ] f. Rebates and discounts on purchase [ ] g. Visual display [ ] Q9. Rate the importance of following for you in a retail store on a scale of 1 to 5, where: Least important =1 & Most important =5 a. Multiple brands 1 2 3 4 5 b. Variety 1 2 3 4 5 c. Quality 1 2 3 4 5 d. Store ambience 1 2 3 4 5 e. Window display 1 2 3 4 5 f. Staff behavior 1 2 3 4 5 g. In-store promotions 1 2 3 4 5 h. Sales promotion initiative publicized out-store 1 2 3 4 5 i. Deals and offers 1 2 3 4 5 j. Convenience in shopping and product placement 1 2 3 4 5 k. Affordability 1 2 3 4 5 Q10. Would you like to buy apparels of a new brand launched in the Large Format Store? a. Yes [ ] b. No [ ]
  54. 54. STEVENS BUSINESS SCHOOL BATCH: 2009-2011 IIP REPORT Page53 Q11. Do you think location of store in the proximity area affects your purchase behavior? a. Agree [ ] b. Neither Agree nor Disagree [ ] c. Disagree [ ] Q12. Have you availed the facility of exclusive benefits and privileges given to loyal customers who frequently visit the stores? (E.g. Green card in case of Pantaloons, and first citizen cards in case of Shoppers Stop) a. Yes [ ] b. No [ ] Q13 For the following brands, from where would you like to shop: Exclusive Brand Outlet Large Format Store a. Flying Machine [ ] [ ] b. Van Heusen [ ] [ ] c. Pepe Jeans [ ] [ ] d. Reid & Taylor [ ] [ ] e. Wrangler [ ] [ ] f. Lee [ ] [ ] g. Levi‘s [ ] [ ] h. John Players [ ] [ ] i. Allen Solly [ ] [ ] j. Liverpool [ ] [ ] k. Koutons [ ] [ ] PERSONAL INFORMATION 1. Name: _________________ 2. Gender: Male [ ] Female [ ] 3. Age group (in yrs): a. Under 18 [ ] b. 18-25 [ ] c. 26-35 [ ] d. 36-55 [ ] e. > 55 [ ] 4. Area of the residence: ________________________ 5. Occupation: ________________________

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